Pioneered by the Indian Government, specifically under the Small Industrial Development Bank of India (SIDBI). The Mahila Udyam Nidhi Scheme aims to both uplift and empower more women entrepreneurs to enter the field of business. First offered by Punjab National Bank (under SIDBI’s guidance), the scheme empowers women entrepreneurs by offering financial aid at marginal rates of interest.
By making use of the funding provided by the Mahila Udyam Nidhi Scheme, MSMEs can engage in a wide range of business functions. This includes manufacturing, production, and service-related activities.
The key benefits of the Mahila Udyam Nidhi Scheme are listed below:
The scheme promotes the rise of women entrepreneurs
Augments the employment opportunities available in the tiny and small-scale industry sectors
Aids in bridging the gender gap and in achieving economic equity
Helps rehabilitate and restructure SSI units
Aids in the expansion and modernisation of technology services offered by the service industry
The key features of the Mahila Udyam Nidhi Scheme are listed below:
Both women entrepreneurs and MSMEs are eligible for a loan of up to ₹10 Lakhs under the aegis of this scheme.
This loan amount can be utilised for the purpose of production, manufacturing and service-related business functions.
In addition to the above, the loan can also be used to upgrade existing manufacturing units as well as technology.
For those availing of a loan under this scheme, the maximum tenure for repayment is 10 years, with a provision for extending the loan moratorium for 5 years.
For every business looking to opt for a loan under this scheme, as much as 25% of the total project cost can be availed in the form of a loan under the Mahila Udyam Nidhi Scheme. However, there is a ceiling of ₹2.5 Lakhs on every project.
Women entrepreneurs are given loans at concessional rates of interest, which can vary from time to time. In this case, this figure varies based on the project cost and can go up to 12% p.a. In addition to this, a service charge of 1% per year is charged by banks for the loan amount offered.
The interest rate on such loans varies from bank to bank and is calculated based on the applicant’s credit history, and the location and type of business in question.
A service charge of 1% per year is charged for loans availed under this scheme. In a few select cases, this service charge may even be waived off – but it is at the sole discretion of the lending authority.
When availing of this scheme, women entrepreneurs are not required to submit any form of security or collateral.
While the loan amount is sanctioned by SIDBI, being a development bank, it offers loans to women entrepreneurs via banks, NBFCs, and microfinance institutions.
The Mahila Udyam Nidhi Scheme eligibility details are listed below:
This loan is only offered to women entrepreneurs – those launching or running a new business.
To avail of this scheme, women entrepreneurs should necessarily hold at least 51% of the company’s share.
This loan is only sanctioned to businesses involved in activities pertaining to manufacturing, production, and services. It can also include upgrading machines or services, expanding the scope of business activities, further diversifying branches of business, or launching a new business.
The business should have made a minimum investment of ₹5 Lakhs.
If a loan is availed of under the Mahila Udyam Nidhi Scheme, it can only be utilised for certain purposes.
Here’s a list of some of the most common businesses approved under the Mahila Udyam Nidhi Yojana:
Auto-repairing and Servicing Centres
Cable TV Network
Computerised Desktop Publishing
Laundry and Dry Cleaning
Road Transport Operator
Servicing of Agricultural and Farm Equipment
Purchase of two-wheelers and four-wheelers for the purpose of business
Washing Machines and other electrical gadgets
The Mahila Udyam Nidhi Scheme was first launched by the Punjab National Bank, under the guidance of the Small Industrial Development Bank of India (SIDBI).
The Mahila Udyam Nidhi Scheme was first launched in 2021.
Given that SIDBI is a development bank, it does not disburse the loan amount itself. Instead, it offers loans to women entrepreneurs through Punjab National Bank.